Receivable financing is structured exactly the way a Merchant Cash Advance is. However, the difference between our funding sources and our competitors is incomparable.
Because this product is privately funded, the cost of money is much less than larger institutions that have borrowed from Hedge Funds. It’s a simple model:
The Costs are Less so we can Sell For Less!
It is very rare we lose a client to a competitor- in fact we love when a merchant is working with a competitor because we know they can’t compete with us.
Receivable Financing is not a loan. It is an Advance on a merchant future credit card sales based off a factor rate (not interest) and their FICO score does not matter (individuals with 430 credit scores have been lent to already!) Funding is up to 150% or more of their monthly credit card volume. It is cash in the business owner’s pocket which they can use for any purpose. This is a zero personal liability advance and can fund within three business days of submission.
Money is secured through their Visa/Master Card sales only. A split is attached on their credit card processing company, making a certain agreed upon percentage come out of each sale. The purpose of this methodology of payment is to alleviate the pressures of a bank looking over their shoulder demanding a check each month- no matter how well the merchant performs.
Example: Underwriting determines that “Client A” can afford a 12% split off their Visa Master Card sales. The merchant then sells a soda for $1.00 and the client pays using a credit card. $0.88 would go into the merchant’s account and the $0.12 difference would automatically go back into the lender’s account.
This way the merchant is able to pay back funds based on how well they do. If they do really well one month they pay us back a little quicker, if they do really slow one month they end up paying us back over a longer period of time.
These advanced terms range from 4 months to 14 months depending on each merchant’s individual deal. However, the are essentially getting “tomorrow’s money today.”
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